Payrolls decreased in 26 U.S. states, led by Ohio, Illinois

Payrolls decreased in 26 U.S. states in March, showing the recent labor-market slowdown is being felt across the country. Jobless rates also dropped in 26 states last month.

Ohio led the drop in employment, losing 20,400 jobs last month, followed by Illinois’ 17,800 decrease, according to figures released today in Washington by the Labor Department.

The U.S. economic expansion has cooled at the start of the second quarter, which may give companies reason to taper hiring. In March, payrolls nationally expanded by 88,000 workers, the fewest in nine months, after increasing by 268,000 workers in February, the Labor Department said April 5. The unemployment rate fell to 7.6%, a four-year low, from 7.7%.

“Firms remain reluctant to add workers,” Josh Dennerlein, an economist at Bank of America Corp. in New York, said before the report. “Overall, we can expect moderate progress in the labor market this year.”

The jobless rates in seven states, including Florida, New Jersey and Virginia, dropped by 0.3 percentage point in March, the biggest decline.

Unemployment rose to 9.7% in Nevada, making it the state with the highest rate in the country. Illinois’ rate was unchanged at 9.5%, making it the second-highest.

North Dakota remained the state with the lowest jobless rate in the nation, holding at 3.3% rate.

Separate Survey

State and local employment data are derived independently from the national statistics, which are typically released on the first Friday of every month. The state figures are subject to larger sampling errors because they come from surveys of smaller size, in turn making the national figures more reliable, according to the government’s Bureau of Labor Statistics.

With data showing the job market in the U.S. weakened in March, Federal Reserve Bank of New York President William C. Dudley said central bank officials have scope for maintaining their record monetary stimulus.

“While I don’t want to read too much into a single month’s data, this underscores the need to wait and see how the economy develops before declaring victory prematurely,” Dudley said on April 16. The slowdown, “along with the large amount of fiscal restraint hitting the economy now, makes me more cautious. We have seen only a moderate improvement in labor market conditions over the past six months or so.”

His concern was heightened by the threat of sequestration, the federal government spending cuts that began taking effect on March 1. The cuts will trim 5% from domestic agencies and 8% for the Defense Department this fiscal year.